The decision to implement an ERP in the cloud or on your own premises is not a technical one but a strategic one. And yet, most companies make it by following the trend of the moment or the sales pitch of their current vendor. The problem is that this decision shapes the next ten years of operations, so it's worth thinking through carefully.

What really changes between a cloud ERP and an on-premise one?

The key difference is not where the data sits, but who maintains the system. With a cloud ERP, your company pays a monthly fee and the vendor takes care of servers, backups, updates and uptime. With an on-premise ERP, your company buys licences, installs the software on your own servers and takes on all the maintenance.

Both options work. What changes is the cost structure, the flexibility and the type of problems you'll have to manage.

When does a cloud ERP make sense?

For most SMEs, a cloud ERP is the most sensible option. The reasons are concrete:

  • No heavy initial investment. You start paying a monthly fee from day one, without having to buy servers or licences upfront
  • The vendor handles maintenance. Updates, security patches, backups and uptime are already included in the fee
  • Access from anywhere. If your team works from different offices, on-site or remotely, access is immediate without VPN or complex configurations
  • Scales with the company. Adding users or modules is a click and an adjustment on the monthly invoice

If your company has fewer than 50 employees, doesn't handle particularly sensitive data and prioritises not having to worry about infrastructure, a cloud ERP such as Holded, Odoo Online or Zoho One covers the needs without surprises.

When does an on-premise ERP make sense?

On-premise ERP remains the best option in specific cases:

  • Companies with sensitive data that must not leave the premises for legal or strategic reasons — sectors such as defence, healthcare or certain public services
  • Highly customised processes that require deep system modifications, difficult or impossible in a standard cloud ERP
  • Companies with their own IT department capable of maintaining the infrastructure without relying on external vendors
  • Unreliable internet connections in your area, where a network outage would stop all operations

The initial cost is much higher — between licences, servers and implementation you can easily reach €30,000 or more — but in the long term, for large companies with intensive usage, it may work out more economical than paying monthly fees for years.

The false debate about long-term cost

There's an argument that keeps coming up: "cloud ERP works out more expensive in the long term because you pay forever." That's only partly true. If you compare the cloud ERP monthly fee with the fixed cost of on-premise licences, the cloud looks more expensive at 5 or 10 years' horizon.

But that calculation ignores the hidden costs of on-premise: the server that needs replacing every 5 years, major updates that require external consultancy, the technician who maintains the system, offsite backups that also cost money. When you add it all up, the economic difference is usually much smaller than it appears.

Are there intermediate options?

Yes, and they're increasingly popular. Some ERPs like Odoo can be hosted on a cloud server of your choice — AWS, Hetzner, a local VPS — maintaining control over the infrastructure without having to maintain it physically. This is an interesting option for companies that want the advantages of the cloud without depending on a single SaaS vendor.

At EstructuraBit we help companies make this decision with real data, without any commercial agenda behind it. If you're considering implementing an ERP and don't know where to start, write to us and we'll guide you through the process.

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